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Rep. Brad Sherman, D-Calif., told NAFCU Congressional Caucus attendees he looked forward to devising a statute allowing financial institutions to notify consumers about the specifics of a data security breach when reissuing cards because of it.

Sherman said retailers responsible for lax security resulting in massive data security breaches should have to pay for "at least part" of the problem. He said it makes no sense for credit unions to invest heavily in security and then pay for the mistakes of others. He also cited the First Amendment when he said it was wrong that credit unions couldn't explain to their members where a data breach had occurred when reissuing cards, and he said he would address that legislatively.

He also reiterated his support for raising the member business lending cap. "You see on the ground what I see, and that is how small business is the great mover of our economy, and it needs capital to expand." A supporter of credit unions' tax-exempt status, he said, "I'm surprised this is still an issue, but it keeps popping up."

Sherman said he joined with other lawmakers in pushing NCUA to reevaluate its risk-based capital proposal. He added credit unions should be recognized for their credibility on issues of capital, because credit union failures are borne by the industry rather than taxpayers. "I'm thrilled to be in a room filled with financial services executives, none of whom took a penny from TARP," he added, referring to the Troubled Asset Relief Program.

The lawmaker also spoke about housing finance reform, saying that the Protecting American Taxpayers and Homeowners (PATH) Act does not do enough to allow small- and medium-sized lenders to originate mortgage loans and be able to sell them in the secondary mortgage market.